SGX's listing gambit: Opportunity or illusion?
After a slow start to 2025, SGX is showing signs of renewed energy. Recent debuts include Info-Tech Systems on Jul 4, NTT DC Reit, the largest real estate investment trust IPO in 10 years, and China Medical System as a secondary listing. The IPO pipeline is improving, a stark contrast to the first half of the year when Singapore saw just one listing compared to Malaysia's 32.
Of the 29 secondary listings on SGX's Mainboard, nine have come since 2020, mainly from Hong Kong. The performance has been mixed, with some stocks facing low trading volumes and investor disinterest. AMTD Idea represents these issues, seeing its shares drop 74% after its SGX debut.
However, there are positive developments. PC Partner Group stands out, rising from 85 cents to over $2 since its November 2024 listing, boosted by demand for AI-driven chips. The company's move to Singapore shows potential for success.
A closer look shows some subtle challenges. Many upcoming listings are spin-offs from existing companies, such as Coliwoo from LHN Group and Lum Chang Creations from Lum Chang Holdings. This raises questions about real market growth.
The Monetary Authority of Singapore (MAS) is taking action. Proposed regulatory changes include simpler prospectus reuse and tax breaks to attract more listings. The exchange has also introduced Singapore Depository Receipts (SDRs), with 21 securities currently available.
Mark Liew, CEO of PrimePartners Corporate Finance, the issue manager for AMTD Idea and TSH Resources' Singapore listings, noted in an interaction with The Edge Singapore: 'I know of so many high-net-worth individuals who happily trade US, Hong Kong and China stocks. But for Singapore, they want safety.'
'These individuals see their Singapore portfolio as a hedge, giving them good income. If everything elsewhere is too volatile, they come back to Singapore. In that sense, the volatility and trading are not there in Singapore,' he added.
However, other observers call for a broader view, highlighting how investors in Singapore undervalue growth stocks compared to markets like Hong Kong. This is a crucial market perception problem.
Key challenges in Singapore include:
Low trading liquidity
Limited interest in growth stocks
High regulatory compliance costs
Reliance on spin-off listings
While the benchmark Straits Times Index (STI) is rising — it's surpassed the 4,000-point mark — fundamental questions remain. Are these listings genuinely deepening the market, or just inflating headline numbers?
As the market review committee prepares to release its next recommendations, the challenge is clear. SGX must prioritise quality over quantity. Important capital formation, strong governance, and lasting trading interest should take precedence over just counting short-term listings.
The final decision is still pending. Are secondary listings a strategic opportunity or an expensive detour?
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